BUAD 307 Final Exam Questions With Correct Answers
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Course
BUAD 307
Institution
BUAD 307
BUAD 307 Final Exam Questions With
Correct Answers
The model of advertising encoding and decoding discussed in class:
a. Includes a vulnerability to the effects of "noise."
b. Is used to determine how to most effectively implement sales promotion.
c. Is used to examine a brand's location on th...
BRIGHTSTARS EXAM STUDY SOLUTIONS 8/15/2024 2:05 PM
BUAD 307 Final Exam Questions With
Correct Answers
The model of advertising encoding and decoding discussed in class:
a. Includes a vulnerability to the effects of "noise."
b. Is used to determine how to most effectively implement sales promotion.
c. Is used to examine a brand's location on the S-shaped curve of advertising effectiveness.
d. Suggests that the use of triggers will be ineffective during the maturity phase of the product
life cycle.
e. Predicts that the effectiveness of encoding will be proportional to the natural logarithm of the
speed of decoding. - answer✔✔A. Includes a vulnerability to the effects of "noise."
Electric—as opposed to hybrid or gasoline powered —cars have only been available for a limited
time, and so far, these are bought only by a small fraction of car buyers. Based on this
information, it appears that:
a. Electric cars are undergoing revitalization.
b. Competition is in this market is likely to be intense.
c. Electric cars are either in the introduction or growth stages of the Product Life Cycle.
d. Electric cars represent an example of a continuous innovation.
e. Manufacturers should focus on demographic segmentation. - answer✔✔Electric cars are either
in the introduction or growth stages of the Product Life Cycle.
Within the context of branding:
a. Co-branding involves two or more brands.
,BRIGHTSTARS EXAM STUDY SOLUTIONS 8/15/2024 2:05 PM
b. Brand extensions are more likely to be successful if the extension is congruent with the
original brand.
c. Store brands tend to be lower priced than national brands.
d. Both (a) and (c).
e. All of the above. - answer✔✔-Co-branding involves two or more brands.
- Brand extensions are more likely to be successful if the extension is congruent with the
original brand.
- Store brands tend to be lower priced than national brands.
The USC Bookstore usually offers customers 10% off on most merchandise during one day near
the end of the Fall semester, a time when people tend to be busy have difficulty finding the time
for shopping. This practice appears to involve:
a. Discontinuous innovation.
b. Implicit price discrimination.
c. A reverse implicit substitution effect based on non-linear demand curves.
d. Skimming.
e. An attempt to improve value-to-bulk ratios based on maximizing absolute margins. -
answer✔✔Implicit price discrimination.
Marketing professionals and economists tend to agree that:
a. It is useful to assume that consumers make quick decisions based on very little information.
b. A very low price will almost certainly result in high sales volumes.
c. An equilibrium price is subject to change if the environment changes.
d. Both (a) and (b).
e. All of the above. - answer✔✔C. An equilibrium price is subject to change if the environment
changes
- Reason why A is wrong: Economists assume that people have perfect information.
- Reason why b is wrong: Marketing professionals would say that this may signal low quality.
In order to cost effectively sell products online as opposed to going through traditional retailers
and wholesalers:
,BRIGHTSTARS EXAM STUDY SOLUTIONS 8/15/2024 2:05 PM
a. The value-to-bulk ratio should be low.
b. Absolute margins are usually more critical than percentage margins.
c. The seller should receive the majority of its revenue from micro-payments.
d. All of the above.
e. None of the above. - answer✔✔B. Absolute margins are usually more critical than percentage
margins.
- Reason why A is wrong: It should be high.
- Reason why C is wrong: that would mean that a lot of the revenue would go to credit card
processing.
Based on the textbook discussion, if demand for ice cream is highly elastic:
a. The skimming approach to pricing will likely maximize profit.
b. A price decrease will likely increase the quantity sold.
c. Advertising will likely have a very large impact on the quantity sold.
d. Segmentation should be based on benefit desired.
e. The promotion signal should be used as a means of increasing intra-brand competition. -
answer✔✔B. A price decrease will likely increase the quantity sold
- Reason why A is wrong: Since there are many competitors, this would not work.
- Reason why C is wrong: Advertising is a weak force that typically has limited impact.
- Reason why D is wrong: This does not logically follow.
- Reason why E is wrong: This is a nonsense answer!
The S-shaped curve of advertising effectiveness suggests that:
a. The increase in sales that results from advertising tends to be proportional to the square of the
amount of money spent.
b. A certain threshold of advertising spending must be reached before the advertising will have
any appreciable impact.
c. Advertising tends to be mostly ineffective if substitutes for a brand or product category exist.
d. Saturation is likely to occur shortly after the "I" stage of the AIDA.
, BRIGHTSTARS EXAM STUDY SOLUTIONS 8/15/2024 2:05 PM
e. Both (a) and (d). - answer✔✔A certain threshold of advertising spending must be reached
before the advertising will have any appreciable impact
According to the author of Contagious:
a. A number of men began to grow mustaches as a way to demonstrate their individuality in
order to counter the strong pressure they felt to conform to the fashions of their peers.
b. The Hotmail e-mail service grew rapidly, in part because outgoing messages showed others
how they, too, could obtain a Hotmail account.
c. The Panda Cheese ads were rather ineffective in India due to strong anti-Chinese sentiment
among Indian consumers.
d. The story of the Lands' End coat suggested that so long as a story is sufficiently entertaining, a
reputation for poor customer service is unlikely to significantly reduce sales.
e. If thirty percent of U.S. college students switched their majors to swine science, the total Gross
Domestic Product (GDP) of the United States would likely increase by more than three percent. -
answer✔✔The Hotmail e-mail service grew rapidly, in part because outgoing messages showed
others how they, too, could obtain a Hotmail account
Doughnuts for Peanuts—located across the street from the Los Angeles Police Department
Headquarters—sells low priced doughnuts. Based on material covered in the text, it appears
likely that the management believes that for this product:
a. A major service gap exists.
b. Price elasticity is high.
c. Additional alpha and beta testing are needed before this product can be sold. d. Both (a) and
(c).
e. All of the above. - answer✔✔Price elasticity is high.
Under current U.S. law, which of the following is/are highly likely to be illegal regardless of
additional facts?
A. Getting together with competitors and agreeing on a minimum price to charge.
b. Manufacturers telling retailers that they must charge at least a certain price.
c. Offering quantity discounts.
d. Both (a) and (b).
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